order denying defendant’s motion to dismiss …...patagonia, inc., patagonia provisions, inc....

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UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

Patagonia, Inc., Patagonia

Provisions, Inc.

Plaintiffs,

v.

Anheuser-Busch, LLC dba

Patagonia Brewing Co.

Defendant.

2:19-CV-02702-VAP-JEMx

Order DENYING Defendant’s Motion to Dismiss Plaintiff’s First

Amended Complaint (Doc. No. 15).

Plaintiffs Patagonia, Inc. and Patagonia Provisions, Inc. (collectively,

“Plaintiffs”) filed this action against Defendant Anheuser-Busch, LLC d/b/a

Patagonia Brewing Co. (“Anheuser-Busch”) on April 9, 2019. (Doc. No. 1.)

Plaintiffs filed the operative First Amended Complaint (“FAC”) on June 5,

2019. (Doc. No. 12.)

On July 3, 2019, Anheuser-Busch filed the pending Motion to Dismiss

(Doc. No. 15, “Motion”). Plaintiffs filed their opposition on July 25, 2019.

(Doc. No. 17.) Anheuser-Busch filed an untimely timely reply on August 9,

2019. (Doc. No. 19). After considering all papers filed in support of, and in

opposition to Anheuser-Busch’s Motion, the Court rules as follows.

Case 2:19-cv-02702-VAP-JEM Document 24 Filed 09/03/19 of 20 Page ID #:487

beatriceherrera

Filed

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I. SUMMARY OF ALLEGATIONS

For more than forty years, Plaintiff Patagonia, Inc. has been designing,

developing, marketing and retailing outdoor apparel, sportswear and related

products. FAC ¶ 6. Patagonia, Inc. has used its PATAGONIA mark

(Registration No. 1,189,402) and its P-6 logo (Registration No. 1,294,523) in

interstate commerce since as early as August 1974. Id. ¶ 8, 36. Plaintiffs

allege that their PATAGONIA brand and P-6 logo have become among the

most identifiable brands in the world. Id. ¶ 8. Patagonia, Inc. has also been

recognized and honored for its sustainable and charitable business

initiatives. Id. ¶ 9. Since 1985, Patagonia, Inc. has pledged 1% of sales to

environmental groups to preserve and restore our natural environment,

donating more than $100 million to date. Id. In 2002, Patagonia, Inc.’s

founder, Yvon Chouinard, created a non-profit called 1% For the Planet® to

encourage other businesses to do the same. Id. To date, more than 1200

companies have donated more than $150 million to over 3,300 nonprofits

through 1% For the Planet®. Id. In 2012, Plaintiff Patagonia Provisions,

Inc., a related company, began developing, marketing and selling socially

and environmentally responsible food items under the PATAGONIA

PROVISIONS® mark (Registration No. 4,168,329), including beer, buffalo

jerky, salmon, fruit and almond bars, and soup mixes. Id. ¶¶ 4, 10.

Defendant Anheuser-Busch is a global producer of beer and other

products and services under a multitude of brands. Id. ¶ 11. Among its

brands is Anheuser-Busch’s PATAGONIA beer, which it sells under the

business name Patagonia Brewing Company. Id. ¶¶ 11-12. Anheuser-

Busch purports to own the registered trademark PATAGONIA (Registration


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No. 4,226,102) for use in connection with beer. Id. ¶ 16; Def. RJN, Ex. A.

According to Plaintiffs, Anheuser-Busch recently launched its PATAGONIA

beer at ski resorts in Colorado, where its sales people dressed in black

down jackets with Anheuser-Busch’s PATAGONIA logo on the chest and

gave out beanies, scarves, and t-shirts all bearing the same PATAGONIA

logo. FAC ¶ 2. At the ski resorts, Anheuser-Busch set up a pop-up store,

featuring a large PATAGONIA sign and a placard describing “Patagonia’s

‘tree positive’ mission,” where customers were told that Anheuser-Busch

would plant one tree for every case of beer purchased. Id.

Plaintiffs allege that Anheuser-Busch, in launching its PATAGONIA

beer, has deliberately misappropriated the tremendous goodwill that

Plaintiffs have cultivated in their PATAGONIA brand. Id. ¶ 3. Plaintiffs

allege that Anheuser-Busch has created a logo that is strikingly similar to

Patagonia, Inc.’s P-6 logo. Id. ¶ 51. Plaintiffs further allege that Anheuser-

Busch’s environmental conservation initiative is a clear attempt to copy

Plaintiffs’ famous brand identity. Id. ¶ 49. Below is a side-by-side

comparison of the parties’ respective marks:


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Additionally, Plaintiffs allege that Anheuser-Busch’s PATAGONIA

registration was procured unlawfully and through fraudulent

misrepresentations to the United States Patent and Trademark Office

(“USPTO”). Id. ¶ 16. Anhueser-Busch’s application for registration for

PATAGONIA to be used in connection with beer (International Class 32) was

initially filed on June 8, 2006 by competitor Warsteiner Importers Agency,

Inc. (“Warsteiner”). Id. ¶ 18. On July 21, 2009, the USPTO issued the

“Notice of Allowance” for Warsteiner’s intent to use (“ITU”), inviting

Warsteiner to secure its registration by showing commercial use of the

mark. Id. ¶ 21. Beginning on January 18, 2010, Warsteiner repeatedly

requested an extension of time to file its statement of use every six months.

Id. ¶ 22. On January 5, 2012, Warsteiner filed its fifth and final permissible

extension to show use, which was set to expire on July 12, 2012. Id.

On July 17, 2012, four days before Warsteiner’s ITU application was set

to fall abandoned for failure to use the mark, Anheuser-Busch’s attorney

filed a “Statement of Use” on behalf of Warsteiner, showing a single bottle


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as a specimen that used the same “Patagonia” label that Anheuser-Busch

submitted to the Alcohol and Tobacco Tax and Trade Bureau for Certificate

of Label Approval. Id. ¶ 24. On October 16, 2012, Warsteiner’s registration

for PATAGONIA was issued by the USPTO in reliance on Warsteiner’s

statement that it had used its PATAGONIA mark in interstate commerce in

the United States as of July 16, 2012. Id. ¶¶ 25-26. On February 8, 2013, a

trademark assignment was recorded with the USPTO, reflecting

Warsteiner’s assignment of the PATAGONIA trademark and registration to

Anheuser-Busch on December 20, 2012. Id. ¶ 27.

Plaintiffs allege that Anheuser-Busch submitted false evidence to the

USPTO to obtain unlawfully a trademark for PATAGONIA in connection with

beer. Id. ¶ 1. Plaintiffs assert that Warsteiner’s assignment “did not occur

until after the registration was issued when, in fact, the improper assignment

of the intent to use application already had occurred.” Id. ¶ 91. Further,

Plaintiffs assert that Warsteiner, through Anheuser-Busch’s attorney, filed a

false “Statement of Use” because Warsteiner never used the PATAGONIA

mark on beer in interstate commerce. Id. ¶ 25.

Based on the foregoing, Plaintiffs assert the following claims under the

Lanham Act and California law: (1) trademark infringement, in violation of 15

U.S.C. §§ 1114-1117; (2) false designation of origin and false description, 15

U.S.C. § 1125(a); (3) trademark dilution, 15 U.S.C. § 1125(c); (4) trademark

infringement and unfair competition under California statutory law, in

violation of California Business & Professions Code §§ 14320, 14335 and

17200; (5) cancellation of trademark registration under 15 U.S.C. § 1060(a);


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(6) cancellation of trademark registration under 15 U.S.C. § 1052(a); (7)

cancellation of trademark registration under 15 U.S.C. § 1119; and (8)

rectification of trademark registration, 15 U.S.C. § 1119. (Doc. No. 12.)

II. LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(6) allows a party to bring a motion

to dismiss for failure to state a claim upon which relief can be granted. Rule

12(b)(6) is read along with Rule 8(a), which requires a short, plain statement

upon which a pleading shows entitlement to relief. Fed. R. Civ. P. 8(a)(2);

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). When evaluating a

Rule 12(b)(6) motion, a court must accept all material allegations in the

complaint—as well as any reasonable inferences to be drawn from them—

as true and construe them in the light most favorable to the non-moving

party. See Doe v. United States, 419 F.3d 1058, 1062 (9th Cir. 2005).

“While a complaint attacked by a Rule 12(b)(6) motion to dismiss does

not need detailed factual allegations, a plaintiff's obligation to provide the

‘grounds’ of his ‘entitlement to relief’ requires more than labels and

conclusions, and a formulaic recitation of the elements of a cause of action

will not do.” Twombly, 550 U.S. at 555 (citations omitted). Rather, the

allegations in the complaint “must be enough to raise a right to relief above

the speculative level.” Id.

To survive a motion to dismiss, a plaintiff must allege “enough facts to

state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at

570; Ashcroft v. Iqbal, 556 U.S. 662, 697 (2009). “The plausibility standard


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is not akin to a ‘probability requirement,’ but it asks for more than a sheer

possibility that a defendant has acted unlawfully. Where a complaint pleads

facts that are ‘merely consistent with’ a defendant's liability, it stops short of

the line between possibility and plausibility of ‘entitlement to relief.’” Iqbal,

556 U.S. at 678 (quoting Twombly, 550 U.S. at 556).

The Ninth Circuit has clarified that (1) a complaint must “contain

sufficient allegations of underlying facts to give fair notice and to enable the

opposing party to defend itself effectively” and (2) “the factual allegations

that are taken as true must plausibly suggest an entitlement to relief, such

that it is not unfair to require the opposing party to be subjected to the

expense of discovery and continued litigation.” Starr v. Baca, 652 F. 3d

1202, 1216 (9th Cir. 2011).

Although the scope of review is limited to the contents of the complaint,

the Court may also consider exhibits submitted with the complaint, Hal

Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1555 n.19 (9th

Cir. 1990), and “take judicial notice of matters of public record outside the

pleadings,” Mir v. Little Co. of Mary Hosp., 844 F.2d 646, 649 (9th Cir. 1988).

Moreover, “[d]ocuments whose contents are alleged in a complaint and

whose authenticity no party questions, but which are not physically attached

to the pleading, may be considered in ruling on a Rule 12(b)(6) motion to

dismiss.” Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994) overruled on

other grounds by Galbraith v. Cty. of Santa Clara, 307 F.3d 1119 (9th Cir.

2002).


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III. DISCUSSION

Anheuser-Busch moves to dismiss Plaintiffs’ third, fourth, fifth, sixth, and

seventh claims alleged in the FAC for failure to state a claim pursuant to

Rule 12(b)(6) and for a more definite statement pursuant to Rule 12(e).1

(Doc. No. 15).

To allege trademark dilution, a plaintiff must plead that “(1) the mark is

famous and distinctive; (2) the defendant is making use of the mark in

commerce; (3) the defendant’s use began after the mark became famous;

and (4) the defendant’s use of the mark is likely to cause dilution by blurring

or dilution by tarnishment.” Jada Toys, Inc. v. Mattel, Inc., 518 F.3d 628, 634

(9th Cir. 2008) (citing 15 U.S.C. § 1125(c)(1)). “A mark is famous if it is

widely recognized by the general consuming public of the United States.”

15 U.S.C. § 1125(c)(2)(1).

Anheuser-Busch argues that the Court should dismiss Plaintiffs’ federal

trademark dilution claim because (1) Plaintiffs fail to plead specific facts in

support of their claim, and (2) as a matter of law, Plaintiffs’ PATAGONIA

1 In connection with its Motion, Anheuser-Busch has requested that the Court take judicial notice of seventeen exhibits. (Doc. No. 16.) The Court takes judicial notice of the USPTO record for Registration No. 4,226,102 for the PATAGONIA mark for beer (Exhibit A) and the USPTO record for appli-cation, Serial No. 86/455,281, for the PATAGONIA PROVISIONS mark for wines (Exhibit B). See Metro Pub., Ltd. v. San Jose Mercury News, 987 F.2d 637, 641 n. 3 (9th Cir. 1993) (taking judicial notice of trademark docu-ments from the USPTO because their “accuracy cannot reasonably be questioned”). Because the Court need not consider Exhibits C-Q in decid-ing this Motion, the Court declines to take judicial notice of them.


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mark lacks the requisite level of distinctiveness to be “famous.” Motion at

20.

“To meet the ‘famousness’ element of protection under the dilution

statutes, a mark must be truly prominent and renowned.” Avery Dennison

Corp. v. Sumpton, 189 F.3d 868, 875 (9th Cir. 1999) (quotations and citation

omitted). Under the Trademark Dilution Revision Act, four non-exclusive

factors are relevant when determining whether a mark is sufficiently famous

for anti-dilution protection: (1) The duration, extent, and geographic reach of

advertising and publicity of the mark, whether advertised or publicized by

the owner or third parties; (2) the amount, volume, and geographic extent of

sales of goods or services offered under the mark; (3) the extent of actual

recognition of the mark; and (4) whether the mark was registered under the

Act of March 3, 1881, or the Act of February 20, 1905, or on the principal

register. 15 U.S.C. § 1125(c)(2)(A).

Here, the Court finds that Plaintiffs have sufficiently alleged that its

PATAGONIA mark is famous and distinctive. Plaintiffs received registration

for its PATAGONIA trademark on February 9, 1982, with its first date of use

in August of 1974. FAC ¶ 36; Registration No. 1,189,402. Plaintiffs allege

that in the “more than forty years since Patagonia, Inc.’s business started,

the PATAGONIA brand and its P-6 logo have become among the most

identifiable brands in the world.” Id. ¶ 7. Plaintiffs allege that it has spent

enormous amounts of time, money, and effort in advertising and promoting

the products and services on which their PATAGONIA trademarks are used,

including in print, on the Internet and at numerous retailers. Id. ¶ 40.


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Plaintiffs also allege that they have sold their PATAGONIA brand products all

over the world. Id. ¶ 41. Further, with respect to sales, Plaintiffs allege that

“since 1985, Patagonia, Inc. has pledged 1% of sales to environmental

groups … donating more than $100 million to date.” Id. ¶ 9. This amounts

to $10 billion in sales since 1985. In addition, Plaintiffs allege that it owns

numerous federal registrations for their PATAGONIA trademark and P-6

logo. Id. ¶ 36. Assuming these allegations are true and construing the facts

in the light most favorable to Plaintiffs, Plaintiffs have sufficiently alleged that

its PATAGONIA mark is “famous” for purposes of its federal trademark

dilution. Accordingly, the Court DENIES Anheuser-Busch’s motion to

dismiss Plaintiffs’ third claim.

A. California Trademark Claims (Claim Four)

Anheuser-Busch moves to dismiss Plaintiffs’ fourth claim for “Trademark

Infringement and Unfair Competition Under California Statutory Law,”

arguing that this claim fails because Plaintiffs cite inapplicable statutes and

state no facts supporting a claim for dilution under the cited California

statute. Motion at 17-18. In response, Plaintiffs contend that the substance

of the FAC puts Anheuser-Busch on notice of Plaintiffs’ state law claims; and

to the extent Plaintiffs’ statutory citations were obsolete, they offered to

clarify their state law claims in discovery or by filing a post-Motion

amendment. Pln. Opp. at 13, fn. 5. According to Plaintiffs, “[t]here is no

basis to dismiss the claims and any questions about what statutes are relied

upon can easily be cured in discovery.” Id. The Court agrees that any

doubt regarding the state law statutes upon which Plaintiffs rely can be

resolved in discovery. Accordingly, the Court DENIES Anheuser-Busch’s


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motion to dismiss Plaintiffs’ fourth claim, but orders Plaintiffs to file an

amended complaint no later than October 3, 2019.

B. Cancellation of Anheuser-Busch’s PATAGONIA Mark

Plaintiffs’ Fifth, Sixth and Seventh claims seek to cancel Anheuser-

Busch’s PATAGONIA trademark (Registration No. 4,226,102) on numerous

grounds. FAC ¶¶ 83-93. The Lanham Act gives federal courts authority to

cancel an invalid trademark registration. See Petroliam Nasional Berhad v.

GoDaddy.com, Inc., 897 F. Supp. 2d 856, 869 (N.D. Cal. 2012), aff'd, 737

F.3d 546 (9th Cir. 2013) (citing 15 U.S.C. § 1119). Anheuser-Busch moves

to dismiss each of Plaintiffs’ cancellations claims pursuant to Rule 12(b)(6)

and Rule 12(e). Motion at 7-17.2 The Court evaluates the sufficiency of

each of Plaintiffs’ cancellation claims in turn, below.

1. Cancellation Pursuant to Section 10(a) of the Lanham Act (Claim

Five)

Under the Lanham Act, an intent-to-use application cannot be assigned

before the applicant files a verified statement that he or she is using the

mark, unless the part of the applicant's business that pertains to the mark is

also assigned and that business is still “ongoing and existing.” 15 U.S.C. §

1060(a)(1). Violating this “anti-trafficking rule” voids the assignment as well

as the underlying application and resulting registration. The Clorox Co. v.

2 Throughout its Motion, Anheuser-Busch emphasizes that its PATAGONIA mark is “incontestable.” See Motion at 1-2, 4-6, 14, 16, 18. The Court notes that the incontestability of a trademark is irrelevant to Plaintiffs’ cancellation claims. See, e.g., Fed. Treasury Enter. Sojuzplodoimport v. Spirits Int'l N.V., 623 F.3d 61, 69 (2d Cir. 2010) (holding that “the question of the validity of the assignment is antecedent to the question of incontestability”).


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Chemical Bank, 40 U.S.P.Q.2d (BNA) 1098, 1104 (T.T.A.B.1996). Federal

courts may also cancel registrations based on abandonment. See

Petroliam Nasional Berhad, 897 F. Supp. 2d at 869 (citing 15 U.S.C. §

1064(3)).

Plaintiffs seek to cancel Anheuser-Busch’s PATAGONIA trademark

pursuant to § 10(a) of the Lanham Act, 15 U.S.C. § 1060(a). FAC ¶¶ 78-82.

Plaintiffs further allege that Anheuser-Busch’s PATAGONIA trademark

should be cancelled because Anheuser-Busch “abandoned the registration

after it was purportedly acquired and cannot, several years later, resurrect

the abandoned registration. Id. ¶ 82. Anheuser-Busch argues that Plaintiffs’

fifth claim fails because Plaintiffs do not plead facts to support a claim for a

violation of the anti-trafficking rule or abandonment. Motion at 14-17.

First, Anheuser-Busch argues that Plaintiffs cannot state a claim for

violation of § 10(a) because the assignment—dated December 20, 2012—

took place after the registration was issued on October 16, 2012, and thus,

there can be no violation of the anti-trafficking rule. Motion at 17 (relying on

FAC ¶¶ 26-28). In opposition, Plaintiffs argue that its allegations support the

plausible inference that Warsteiner actually assigned the ITU to Anheuser-

Busch on May 14, 2012, the date Anheuser-Busch’s lawyers took control of

Warsteiner’s application, which was two months before the Statement of

Use was filed on July 17, 2012. Pln. Opp. at 5 (citing FAC ¶¶ 23-24).

Plaintiffs allege that the “date on the assignment document is months after

registration of the mark and yet the assignment does not refer to the

registration or registration number,” and therefore, the date “appears to have


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been falsely stated to disguise the true date of the assignment which

preceded the statement of use.” Id. ¶ 28. Plaintiffs argue that if the

assignment was not effective until the recorded execution date, then there is

no explanation why Anheuser-Busch’s attorneys drafted and submitted to

the USPTO an assignment of the “application.” Pln. Opp. at 6.3

In response, Anheuser-Busch argues that Plaintiffs do not allege facts

from which one can plausibly infer that the date was “falsely stated to

disguise the true date of the assignment” such that the assignment violated

the anti-trafficking rule. Motion at 17. In support, Anheuser-Busch relies on

In re Century Aluminum Co. Sec. Litig., for the proposition that “plaintiffs

cannot offer allegations that are ‘merely consistent with’ their favored

explanation but are also consistent with the alternative explanation.” 729

F.3d 1104, 1108 (9th Cir. 2013) (citing Iqbal, 556 U.S. at 678) (internal

quotation marks omitted). The Court finds Anheuser-Busch’s reliance on In

re Century Aluminum Co. unavailing because it ignores that “facts tending to

exclude the possibility that the alternative explanation is true” can render

Plaintiffs’ allegations plausible within the meaning of Iqbal and Twombly.

See In re Century Aluminum Co. Sec. Litig, 729 F.3d at 1108. Here,

Plaintiffs’ allegations related to Anheuser-Busch’s conduct prior to

registration of the mark, see FAC ¶¶ 19-25, are sufficient to exclude the

3 Plaintiffs allege that the “document verifying the assignment states [that] it ‘assigns… all right, title, in and to the PATAGONIA Application and Mark, together with the goodwill of the business symbolized by the PATAGONIA mark and any resulting registration,’ revealing that the assignment was drafted and effective before any registration had issued.” FAC ¶ 27 (em-phasis in original).


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possibility that Anheuser-Busch’s explanation that the assignment was

drafted before, but executed after, registration is true.

Second, Anheuser-Busch argues that Plaintiffs’ fifth claim does not

plead facts sufficient to cancel its registration based on abandonment.

Motion at 14-16. A mark is abandoned “[w]hen its use has been

discontinued with an intent not to resume such use.” 15 U.S.C. § 1127. The

first element for a claim of abandonment through non-use is “discontinuance

of the trademark.” Electro Source, LLC v. Brandess-Kalt-Aetna Group, Inc.,

458 F.3d 931, 935 (9th Cir. 2006) (citing 15 U.S.C. § 1127). Plaintiffs’

allegations that Anheuser-Busch’s first bona fide use of its PATAGONIA

mark in the United States was six years after the registration was issued

sufficiently alleges the first element. FAC ¶ 30. The second element for a

claim of abandonment through non-use is “intent not to resume such use.”

Electro Source, 458 F.3d at 935. Here, Plaintiffs allege that Anheuser-

Busch’s “current press releases and promotional statements—together with

its disclosures in its public filings—indicate that [Anheuser-Busch] made no

bona fide commercial use of its unlawful PATAGONIA trademark in the five

years following issuance of the registration, and contradict [Anheuser-

Busch’s] sworn statement to the Trademark Office.” FAC ¶ 32. Anheuser-

Busch’s argument that Plaintiffs fail to allege sufficient facts to support the

second element is belied by the Lanham Act itself, which provides that intent

not to resume use “may be inferred from circumstances,” and that “[n]onuse

for 3 consecutive years shall be prima facie evidence of abandonment.” 15

U.S.C. § 1127. Accepting all of Plaintiffs’ allegations as true, the Court finds


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that Plaintiffs have sufficiently stated a claim for abandonment. Accordingly,

the Court DENIES Anheuser-Busch’s motion to dismiss Plaintiffs’ fifth claim.

2. Cancellation by False Suggestion (Claim Six)

Section 2(a) of the Lanham Act, 15 U.S.C. § 1052(a), allows a person or

entity to challenge a trademark filing where it falsely suggests a connection

with another person, corporation or institution. 15 U.S.C. § 1052(a). A

false suggestion claim requires the moving party to show the following four

elements: (1) that the defendant's mark is the same or a close

approximation of plaintiff's previously used name or identity; (2) that the

mark would be recognized as such; (3) that the plaintiff is not connected

with the activities performed by the defendant under the mark; and (4) that

the plaintiff's name or identity is of sufficient fame or reputation that when

the defendant's mark is used on its goods or services, a connection with the

plaintiff would be presumed. See Univ. of Notre Dame du Lac v. J.C.

Gourmet Food Imps. Co., 703 F.2d 1372 (Fed. Cir. 1983); Buffett v. Chi-

Chi's, Inc., 226 U.S.P.Q. (BNA) ¶ 428 (T.T.A.B. June 13, 1985).

Anheuser-Busch argues that Plaintiffs’ allegations are insufficient to

establish the second or fourth element of their false suggestion claim.

Motion at 11-14. As to the second element, Anheuser-Busch argues that the

FAC fails to allege enough facts to state a plausible claim that “as of 2012,

PATAGONIA—for beer—‘uniquely and unmistakably’ identified Patagonia,

Inc.” Motion at 13. To satisfy this element, courts “must determine whether

consumers would view the mark as pointing only to [Plaintiffs], or whether

they would perceive it to have a different meaning.” Lesley Hornby a/k/a


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Lesley Lawson a/k/a Twiggy v. Tjx Companies, Inc., 87 U.S.P.Q.2d 1411

(T.T.A.B. 2008). Such a fact-intensive inquiry is inappropriate on a Rule

12(b)(6) motion because the Court must accept Plaintiffs’ allegations in the

FAC as true. Here, Plaintiffs allege that “the term PATAGONIA uniquely and

unmistakably identified Patagonia, Inc. in the minds of United States

consumers, and has operated in this fashion since well before (a) the

USPTO issued U.S. Trademark Registration No. 4,226,102, or (b)

[Anheuser-Busch] began marketing and selling a PATAGONIA beer.” FAC ¶

42. Accepting these allegations as true, Plaintiffs sufficiently allege the

second element of their false suggestion claim.

As to the fourth element, Anheuser-Busch argues that Plaintiffs fail to

allege facts to support that Plaintiffs’ fame and reputation is such that when

PATAGONIA is used to identify beer, a connection with Plaintiffs would be

presumed. Motion at 14. For this element, the fame or reputation of

Plaintiffs must be determined as of the time of Anheuser-Busch’s

registration for PATAGONIA issued. See Lesley Hornby a/k/a Lesley

Lawson a/k/a Twiggy v. Tjx Companies, Inc., 87 U.S.P.Q.2d 1411 (T.T.A.B.

2008). Thus, Plaintiffs must allege facts to show that Plaintiffs had sufficient

fame and/or reputation as of October 16, 2012.

Here, the FAC alleges that “[a]s a result of the fame and reputation of

Patagonia, Inc.’s identity and name—including at the time that Registration

No. 4,226,102 issued—consumers are and were likely to immediately

associate [Anheuser-Busch’s] use of PATAGONIA on beer with Patagonia,

Inc.” FAC ¶ 87. The Court has already determined that Plaintiffs have


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sufficiently alleged that its PATAGONIA mark is “famous” for purposes of its

federal trademark dilution. See, supra, III.A; see also Chagall v.

Bondarchuk, 82 U.S.P.Q.2d 1838 (T.T.A.B. 2007) (rejecting the registrant’s

argument that the “strict fame requirement” applied in dilution cases applies

to the “fame or reputation” requirement under section 2(a)). Indeed, the

USPTO even acknowledges that “[i]n the more than forty years since

Patagonia’s business started, PATAGONIA® has become one of the most

identifiable brands in the world.” Def. RJN, Ex. B at 39. Thus, Plaintiffs

have alleged sufficient facts to meet the fourth element of their false

suggestion claim. Accordingly, the Court DENIES Anheuser-Busch’s motion

to dismiss Plaintiffs’ sixth claim.

3. Cancellation Based on Fraudulent Procurement (Claim Seven)

A court may order the cancellation of a registered mark if the mark was

procured fraudulently. 15 U.S.C. §§ 1119, 1064. In order to prove fraud on

the USPTO, the party seeking cancellation must show: “a false

representation regarding a material fact, the registrant's knowledge or belief

that the representation is false, the intent to induce reliance upon the

misrepresentation and reasonable reliance thereon, and damages

proximately resulting from the reliance.” Spin Master, Ltd. v. Zobmondo

Entm't, LLC, 778 F. Supp. 2d 1052, 1061 (C.D. Cal. 2011) (citing Robi v.

Five Platters, Inc., 918 F.2d 1439, 1444 (9th Cir. 1990)).

The Court must determine whether Plaintiffs have pleaded their false

procurement claim with the requisite particularity under Rule 9(b). To meet

this standard, the FAC must “identify the who, what, when, where, and how


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of the misconduct charged, as well as what is false or misleading about the

purportedly fraudulent statement, and why it is false.” Cafasso, U.S. ex rel.

v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1055 (9th Cir. 2011)

(internal quotation marks omitted).

Plaintiffs allege that Anheuser-Busch’s PATAGONIA registration was

procured unlawfully and through fraudulent misrepresentations to the

USPTO. FAC ¶ 16. Specifically, Plaintiffs’ fraudulent procurement claim

concerns (1) the Statement of Use filed by Anheuser-Busch on July 17,

2012 and (2) the assignment recorded on February 22, 2013. Anheuser-

Busch argues that Plaintiffs’ fraudulent procurement claim fails because

their allegations fall short of the exacting pleading requirements for fraud.

Motion at 8-11.

As to the Statement of Use, the FAC alleges that on “July 17, 2012, four

days before Warsteiner’s intent to use application was set to fall abandoned

for failure to use the mark, [Anheuser-Busch’s] attorney filed a statement of

use on behalf of Warsteiner, showing a single bottle as a specimen that

used the same ‘Patagonia’ label that [Anheuser-Busch] had recently

submitted to the [Alcohol and Tobacco Tax and Trade Bureau] for approval.”

FAC ¶ 24. The Statement of Use provides that “[t]he mark was first used by

the applicant, or the applicant’s related company, licensee, or predecessor

in interest at least as early as 07/16/2012, and first used in commerce at

least as early as 07/16/2012, and is now in use in such commerce.” Def.

RJN, Ex. A at 14. Plaintiffs allege that this statement is untrue because

Warsteiner never used the PATAGONIA trademark on beer, and thus, the


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Statement of Use filed by Warsteiner and prepared by Anheuser-Busch’s

attorneys was false. FAC ¶ 25. Plaintiffs allege that Anhueser-Busch knew

this statement was false given that the specimen did not show the beer in a

commercial context. Id. Rather, the specimen showed two photos of a

single bottle of PATAGONIA-labeled beer on a table in a white-walled room.

Id. The Court finds that these allegations are pled with the requisite

particularity under Rule 9(b).

As for the assignment, the FAC alleges that Anheuser-Busch “knowingly

misrepresented to the Trademark Office the date when [Anheuser-Busch]

acquired Warsteiner’s purported rights.” FAC ¶ 90. The assignment, dated

December 20, 2012, provides that Warsteiner “hereby assigns to Anheuser-

Busch, LLC all right, title, and interest in and to the PATAGONIA Application

and Mark, together with the goodwill of the business symbolized by the

PATAGONIA mark and any resulting registration.” Id. ¶ 27. Plaintiffs allege

that the “date shown on the assignment document is months after

registration of the mark, and yet the assignment does not refer to the

registration or registration number,” and thus, the date appears to have

been falsely stated to disguise the true date of the assignment which

preceded the statement of use. Id. ¶ 28. Plaintiffs further allege that

“[k]nowing that Warsteiner could not lawfully assign the intent to use

trademark application to [Anheuser-Busch], and knowing that Warsteiner

could not show the use needed to obtain the trademark registration,

[Anheuser-Busch] and Warsteiner colluded through their knowingly false

representations to deceive the Trademark Office—seeking to show that

Warsteiner was responsible for commercial use of the PATAGONIA beer


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shown in the statement of use.” Id. ¶ 29. The Court concludes that these

allegations are sufficient to state a claim for fraudulent procurement.

Accordingly, the Court DENIES Anheuser-Busch’s motion to dismiss

Plaintiffs’ seventh claim.

IV. CONCLUSION

The Court therefore DENIES Anheuser-Busch’s Motion to Dismiss.

Further, the Court orders Plaintiffs to file an amended complaint no later

than October 3, 2019 to clarify Plaintiffs’ fourth claim.

IT IS SO ORDERED.

Dated: 9/3/19

Virginia A. Phillips Chief United States District Judge


order denying defendant’s motion to dismiss …...patagonia, inc., patagonia provisions, inc....

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